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•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
•Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
•The single most important problem in economics is the gap between rich and poor.
•Austerity is the government’s method for widening the gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..
You regular readers of this blog know that ignorance of economics created the disaster now known as the euro. You know the euro nations voluntarily surrendered the single most valuable asset any nation can have: Its Monetary Sovereignty.
Because of their economics ignorance, the whole of the eurozone either is, or soon will be, suffering from austerity, i.e the loss of income, jobs, health care, education, housing — in short, the loss of a decent lifestyle that government is supposed to help provide.
Greece may be the most extreme example currently, but not the only and not the last.
We may shake our heads at the ignorance of people who would allow their government to surrender its most valuable asset, but we needn’t feel too superior. Despite the fact that the U.S. federal government retains its Monetary Sovereignty, and therefore cannot run short of dollars, we allow it to act as though it were monetarily NON-sovereig
We allow the government to husband its dollars like some penurious miser, straight out of Dickens.
The 11 million Americans who receive Social Security disability face steep benefit cuts next year, the government said Wednesday, handing lawmakers a fiscal and political crisis in the middle of a presidential campaign.
The trustees who oversee Social Security and Medicare said the disability trust fund will run out of money in late 2016. That would trigger an automatic 19 percent cut in benefits, unless Congress acts.
The average monthly benefit for disabled workers and their families is $1,017.
Think of it. A disabled person, too ill to work, receives a pittance: $1,017, to support his/her family. But that is too much for the politicians.
The typical beneficiary would see a reduction of $193 a month.
“Today’s report shows that we must seek meaningful, in some instances even urgent, changes to ensure the program is on stable ground for future generations,” said Jo Ann Jenkins, chief executive officer of AARP.
AARP, which supposedly helps seniors and other Social Security beneficiaries, spreads the Big Lie, that taxes fund federal spending.
It’s a lie, because even were FICA to be eliminated, the federal government could continue funding Social Security benefits, forever.
Just as the U.S. federal government never can run short of its own sovereign currency, the dollar, agencies of the federal government never can run short of dollars, unless Congress wills it.
In more bad news for beneficiaries, the trustees project there will be no cost-of-living increase in benefits at the end of the year. It would mark only the third year without an increase since automatic adjustments were adopted in 1975.
Separately, about 7 million Medicare beneficiaries could face a monthly premium increase of at least $54 for outpatient coverage. That works out to an increase of more than 50 percent — for outpatient coverege.
Day by day, month by month, the middle- and lower-income groups are squeezed, just as in Greece, and for no good reason.
The annual report card on the financial health of Social Security and Medicare shows that the federal government’s largest benefit programs are feeling the strain of aging baby boomers as they both approach milestone anniversaries.
“The strain” is another way of saying that more people are growing older, and they need the kind of help a 1st rate government is supposed to provide. Why else would we have a government?
There was some good news in the report: The trustees said Social Security’s retirement fund has enough money to pay full benefits until 2035, a year later than they predicted last year. At that point, Social Security will collect enough in payroll taxes to pay about 75 percent of benefits.
Medicare’s giant hospital trust fund is projected to be exhausted in 2030, the same date as last year’s report. At that point, Medicare taxes would be enough to pay 86 percent of benefits.
The Big Lie continues — the pretense that like you and me (who are not Monetarily Sovereign), the government can run short of dollars to pay its bills. It cannot.
Advocates for seniors say that gives policymakers plenty of time to address both programs without cutting benefits. But some in Congress note that the longer lawmakers wait, the harder it gets to address the shortfall without making significant changes.
Nonsense. It’s not hard at all. Simply acknowledge the federal government’s ability to support Social Security at any desired level, and while making that admission, get rid of the worst tax in U.S. history: FICA.
There is an easy fix available for the disability program: Congress could shift tax revenue from Social Security’s much larger retirement fund, as it has done in the past.
President Barack Obama supports the move. And acting Social Security Commissioner Carolyn Colvin said shifting the tax revenue “would have no adverse effect on the solvency of the overall Social Security program.”
There would be no adverse effect, simply because the U.S. government has the unlimited ability to support Social Security.
But why will Congress not admit this simple truth? Here’s the clue:
Republicans say they want changes in the disability program to reduce fraud and to encourage disabled workers to re-enter the workforce.
In January, Sen. Rand Paul, R-Ky., suggested that a lot of slackers are on disability. Paul, who is running for president, joked that half the people getting benefits are either anxious or their back hurts.
And there you have it. The Republican party of the rich, spreads the cruel lie that disabled people are fraudulent fakers and slackers, who need to be “encouraged” to re-enter the workforce.
Note the simpering laughter of Republican Rand Paul, slandering those unfortunate, disabled people. As if life weren’t difficult enought for them, a liar like Paul has to heep on the scorn. This is the kind of cruelty to the afflicted one has come to expect from Republicans.
Here is Doctor Rand Paul, who grew up in luxury. He received his medical degree from the renowned Duke University School of Medicine. His father also was a doctor, a U.S. Congressman, who ran for President three times. This is the privileged Rand Paul who sneers at the poor, the aged and the disabled, from his lofty perch on high.
If the retirement and disability funds were combined, they would have enough money to pay full benefits until 2034, the trustees said.
Or, the federal government simply could pay the benefits.
The Medicare premium increases would affect Part B, which provides coverage for outpatient services.
For about 70 percent of beneficiaries, premium increases cannot exceed the dollar amount of their Social Security cost-of-living adjustment, or COLA. Because no COLA is currently expected for next year, increased costs of outpatient coverage would have to be spread among the remaining 30 percent.
Translation: The Monetarily Sovereign federal government is running out of money, but the disabled and the poor have plenty of money. So cut federal spending while forcing the people who can afford it least, to pay more.
Why does the government get away with it? Because the electorate is ignorant of economics reality. The people have been brainwashed into believing the federal government can run short of dollars, and/or that any increases in federal spending will cause a Zimbabwe-esque hyperinflation (another part of the Big Lie.)
Just as the Greek people suffer for their economics ignorance, so to do we Americans suffer for ours.
Rodger Malcolm Mitchell
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.
THE RECESSION CLOCK
Vertical gray bars mark recessions.
As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.